Iseq index slips into the red, dragged down by Irish banks

BP falls 1.4% as crude prices drop amid reports Saudi oil supply could recover in weeks

European stocks closed marginally lower yesterday as energy shares gave up a chunk of Monday's big gains and banks lost steam ahead of likely interest rate cut from the US Federal Reserve.

Britain’s blue-chip Ftse 100 index ended flat, while US stocks were also modestly lower as the impact of weekend attacks on Saudi Arabia’s biggest oil refinery faded.


The Iseq fared worse than many other European markets, down 1.6 per cent on the day due in part to a battering taken by listed Irish banks.

Bank of Ireland finished down about 7 per cent to €3.62 per share, while AIB was down more than 5 per cent to €2.57. The European banking sector generally was under pressure due to worries over a new cycle of interest rate cuts, with that pressure felt most acutely in Dublin.


Uniphar, the medical supplies group that debuted on the stock market in July, posted revenue growth of 20 per cent in its maiden listed results. It finished the session up more than 2.5 per cent to €1.15.

The building materials sector also suffered across Europe, with industry behemoth CRH down 1.25 per cent to €30.78 on the Iseq.


BP fell 1.4 per cent as crude prices dropped after a top Saudi Arabian source told Reuters that production could be fully back on line within weeks following weekend attacks that halved the kingdom's output.

Meanwhile, heightened geopolitical worries and global slowdown concerns have sent investors flocking to so-called defensive sectors such as healthcare and tobacco stocks, ahead of a widely expected rate cut by the US Federal Reserve on Wednesday.

AstraZeneca and British American Tobacco were among the biggest boosts on the main index, countering a drag by the financial sector.

French Connection slid 13 per cent to its lowest level in more than a year after the fashion retailer delayed its sale process for the second time, with conclusion now expected by end of the financial year.

Staffline dropped 22 per cent as the recruiter posted a loss in the first half and warned that Brexit had become a source of unprecedented uncertainty for its customers.


Banks slumped the most among the main European subsectors with a 2 per cent drop and Italian banks also fell as much.

The healthcare, utilities, real estate and food and beverage indexes posted some of the biggest gains after taking a hit in recent weeks amid a turn to growth stocks.

The Swiss stock index, which includes many dividend-paying companies, gained about 0.5 per cent.

Frankfurt-listed shares ended flat as data from the ZEW institute showed the mood among German investors improved more than expected in September, although warned that the outlook remained negative due to trade disputes and Brexit uncertainty.


Stocks edged higher and US Treasury yields slipped ahead of an expected interest rate cut by the Federal Reserve at the conclusion of its two-day policy meeting today.

Oil prices dropped sharply and the oil market remained on tenterhooks over the threat of retaliation for attacks on Saudi Arabian crude oil facilities on Saturday. During a news conference yesterday, Saudi Arabia’s energy minister said it will keep its full oil supply to its customers this month and will restore its lost oil output by the end of September.

Brent crude futures settled at $64.55 a barrel, down $4.47, or 6.48 per cent. WTI crude futures settled at $59.34 a barrel, down $3.56, or 5.66 per cent.

The Dow rose 33.98 points, or 0.13 per cent, to end at 27,110.80, the S&P 500 gained 7.72 points, or 0.26 per cent, to finish at 3,005.68, and the Nasdaq added 32.47 points, or 0.4 per cent, to close at 8,186.02. – Additional reporting: Reuters

Mark Paul

Mark Paul

Mark Paul is London Correspondent for The Irish Times